Recently, the Pew Research Center released an interesting study titled "Teens, Social Media, and Privacy." While there are a number of takeaways from this research, there are a couple of points it made that I think are worth focusing on in regard to some of the big players in the space, including Facebook , Google, and Twitter, among others.
The study found that "[f]ocus group discussions with teens show that they have waning enthusiasm for Facebook." This is something that's being kicked around a good bit these days. Is Facebook really losing its "cool factor" with kids? It's hard to say for sure, but the data here that teen enthusiasm for Facebook isn't what it used to be. Look at what happened to MySpace in such a short amount of time. It's not like everybody just quit being social. They just went somewhere else to do it.
The study also reported that "[t]een Twitter use has grown significantly: 24% of online teens use Twitter, up from 16% in 2011."
This is very believable. Say what you want, but Twitter is a far better mobile experience than Facebook, and the data points toward Twitter catching hold with a lot of folks. Twitter now has over 500 million registered users and handles over 2 billion search queries per day. And we all know how valuable search can be. Just ask Google. It's no wonder Facebook is pursuing its Graph Search initiative. (How's that going, by the way?)
Investors in pure-play social networks like Facebook need to keep in mind that there is a genuine risk of active users defecting for any number of reasons, particularly if it gets to a point where any given social network becomes invasive -- or even worse, uncool. And I would argue that Facebook is walking that line. It's not to say that something like Google isn't necessarily invasive. But there's also a difference between explicitly and implicitly getting information.
Google started with search and migrated elsewhere. Facebook and other social networks are doing it the other way around. A bit trickier proposition, in my opinion, and I think that the market is telling us today that it's not so certain yet that Facebook will be able to pull it off. When Twitter goes public, I'll bet it receives the same scrutiny. Let's just hope it's watching Facebook and taking notes.
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The article The Danger of Investing in Social Networks originally appeared on Fool.com.Jason Moser has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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